CONVERSE RUBBER CORPORATION and EDWARDSON MANUFACTURING

CORPORATION, plaintiffs-appellants,

vs.

JACINTO RUBBER & PLASTICS CO., INC.,

and ACE RUBBER & PLASTICS CORPORATION, defendants-appellants.
G.R. Nos. L-27425 & L-30505 April 28, 1980

Digested by ROMERO

Doctrine:

When the law speaks of purchasers' it generally refers to ordinary or average purchasers and not experts.

Facts:

• This is an action for unfair competition. Plaintiff Converse Rubber Corporation, isan American
Corporation, manufacturer of canvas rubber shoes under the trade name"Converse Chuck Taylor
All Star"; in the Philippines, it has an exclusive licensee, plaintiffEdwardson Manufacturing
Corporation, for the manufacture and sale in the Philippines ofits product.
• Plaintiff Converse is the owner of trademarks and patent, registered withUnited States Patent
Office, covering the words. "All Star", the representation and designof a five-pointed star, and the
design of the sole. The trademark "Chuck Taylor" wasregistered by plaintiff Converse with the
Philippines Patent Office on March 3, 1966. Since1946, "Chuck Taylor" is being sold in the
Philippines. It has been used exclusively byPhilippine basketball teams competing in international
competitions. It is also popularamong players in various basketball leagues, like the MICAA and
the NCAA, because ofits high quality and attractive style. "Chuck Taylor" currently retails at P46.00
per pair.
• Defendant Jacinto Rubber & Plastics Company, Inc., a local corporation, likewise,manufactures
and sells canvas rubber shoes. It sells its product under the trade names"Custombuilt Viscount",
"Custombuilt Challenger", and "Custombuilt Jayson's". Itstrademark "Custombuilt Jayson's" was
registered by the Philippines Patent Office .In 1963, plaintiff Converse and defendant Jacinto
entered into protractednegotiations for a licensing agreement whereby defendant Jacinto would
be the exclusivelicense of plaintiff Converse in the Philippines for the manufacture and sale of
"ChuckTaylor" shoes but with the right to continue manufacturing and selling its own
products.One of the points taken up by parties was the design and general appearance
of"Custombuilt" shoes.
• Plaintiff Converse insisted on the condition that defendant Jacintochange the design of
"Custombuilt" shoes so as to give "Custombuilt" a generalappearance different from "Chuck
Taylor." After an extensive discussion, defendantJacinto gave into to the demand of plaintiff
Converse; it submitted to plaintiff Conversefor the latter's approval a sketch of a new design for
"Custombuilt". This design wasaccepted by plaintiff Converse.
• Defendant Jacinto Rubber then proposed that thelicensing agreement be made in favor of its
affiliates, defendant Ace Rubber. On January22, 1965, defendant Ace Rubber signed the licensing
agreement while defendant JacintoRubber and Arturo Jacinto signed the guarantee agreement to
 secure the performanceby defendant Ace Rubber of its obligations under the licensing agreement.
However, the licensing agreement did not materialize, because Hermogenes Jacinto refused to
sign the guarantee.
• Plaintiff Converse and plaintiff Edwardson then executed licensing agreement, making plaintiff
Edwardson the exclusive Philippine licensee for the manufacture and sale of "Chuck Taylor." On
June 18, 1966, plaintiffs sent a written demand to defendants to stop manufacturing and selling
"Custom built" shoes of Identical appearance as "Chuck Taylor". Defendants did not reply to
plaintiffs' letter. Hence, this suit.

Issue:

Are the defendants guilty of unfair competition by giving "Custom built" the same general appearance as
"Chuck Taylor"?

Ruling:

Yes. We find the conclusions of the trial court to be correct in all respects. In fact, in their brief, defendants
do not contest at all the findings of the trial court insofar as material Identity between the two kinds of
shoes in question is concerned.

We haveourselves examined the exhibits in detail, particularly, the comparative pictures and
otherrepresentations if the shoes in question, and We do not hesitate in holding that heplaintiffs
complaint of unfair competition is amply justified.From said examination, we find the shoes manufactured
by defendants to contain,as found by the trial court, practically all the features of those of the plaintiff
ConverseRubber Corporation and manufactured, sold or marketed by plaintiff EdwardsonManufacturing
Corporation, except for heir respective brands, of course.

We fully agreewith the trial court that "the respective designs, shapes, the colors of the ankle patches,
the bands, the toe patch and the soles of the two products are exactly the same ... (such that) at a distance
of a few meters, it is impossible to distinguish "Custom built" from “Chuck Taylor". These elements are
more than sufficient to serve as basis for a charge of unfair competition. Even if not all the details just
mentioned were Identical, with the general appearances alone of the two products, any ordinary, or even
perhaps even a not too perceptive and discriminating customer could be deceived, and, therefore, Custom
built could easily be passed off for Chuck Taylor.

Jurisprudence supports the view that under such circumstances, the imitator must be held liable. It stands
to reason that when the law speaks of purchasers' it generally refers to ordinary or average purchasers....
in cases of unfair competition, while the requisite degree of resemblance or similarity between the names,
brands, or other indicia is not capable of exact definition, it may be stated generally that the similarity
must be such, but need only be such, as is likely to mislead purchasers of ordinary caution and prudence;
or in other words, the ordinary buyer, into the belief that the goods or wares are those, or that the name
or business is that, of another producer or tradesman.

It is not necessary in either case that the resemblance be sufficient to deceive experts, dealers, or other
persons specially familiar with the trademark or goods involved. Nor is it material that a critical inspection
and comparison would disclose differences, or that persons seeing the trademarks or articles side by side
would not be deceived (52 Am. Jur. pp. 600-601). (Brief for Plaintiffs as Appellees, pp. 28-29, p. 71,
Record.)
Dispositive:

WHEREFORE, judgment is hereby rendered - in G. R. No. L-27425 - affirming the decision of the trial court
with the modification of the amount of the damages awarded to plaintiffs in the manner hereinabove
indicated; and in G.R. No. L-30505 - the three orders of dismissal of the trial court of the contempt charges
against appellees are all hereby reversed, and on the basis of the factual findings made by said court in its
last order of January 24, 1968, appellees are hereby declared in contempt of court and the records of the
contempt proceedings (G. R. No. L-30505) are ordered returned to the trial court for further proceedings
in line with the above opinion, namely for the imposition of the proper penalty, its decision being
incomplete in that respect. Costs against appellees in G. R. No. L-27425, no costs in G. R. No. L-30505.
These decisions may be executed separately.